CIMB-MAPLETREE Management plans to establish a second real estate fund totalling RM1 billion (S$432 million) in committed capital to invest mainly in Malaysian properties, as it has invested most of its first fund.
The company had leveraged on the RM400 million CIMB-Mapletree Real Estate Fund 1 (CMREF 1) - launched at the end of 2005 - to raise another RM1 billion or so, but had since deployed 80 per cent of the fund, said chief investment officer Muhyiddin A Razack.
The bulk of it was invested in commercial real estate and some 20 per cent in residential properties.
'We are planning to raise RM1 billion in committed capital for the second fund sometime this year or the next,' Mr Muhyiddin said.
Despite a relatively hefty increase in Malaysian real estate prices over the past two to three years - the steepest in the Kuala Lumpur city centre where prices have doubled in some developments - CIMB-Mapletree Management believes the potential is far from exhausted.
Its new fund size would be 2.5 times the first one, and with investment grade properties harder to come by or priced too richly, Mr Muhyiddin said its focus would be more on development projects.
These projects include middle-to-high range residential projects, which are not deprived of value, he said at the launch of Papillon Desahill Condominium here yesterday.
CIMB-Mapletree was involved in the plans and specifications of the 225 unit Papillon and would jointly promote and share in the profits of the two-winged 15-storey freehold condo apartments being built by developer Peter's Holdings.
The Perak-based family-owned private developer is also a crane manufacturer. Although relatively unknown, it has been around for over 30 years and the gross development value (GDV) of its current and future projects amounts to some RM1.25 billion.
'It's a well-designed product,' Mr Muyhiddin said of Papillon, which is located on 4.5 acres on a hill in Taman Desa, with easy access to Kuala Lumpur and Petaling Jaya.
Slightly over a third of the units priced at an average of RM400 per sq foot have been sold.
Mr Muhyiddin declined to say how the profits would be split or the average returns for CMREF 1, but a number of its investments would have easily yielded over 20 per cent.
Peter Loke, Peter's managing director, said the developer cut its teeth rehabilitating abandoned housing schemes in Perak in the 1980s. Its entry into Kuala Lumpur was courtesy of an invitation by the central bank to participate in a land revival project in Petaling Utama.
Its partnership with CIMB-Mapletree in Papillon, which has a GDV of RM180 million, is its first and could see it moving up the real estate segment in future.
Mr Loke said being a developer and contractor, the company was able to control costs and quality, 'thereby passing these benefits directly back to our customers'.
